Schools Scramble To Meet 'E-Rate' Deadline

Joseph Salvati wasn't taking any chances with the New York City
school district's application for federal "E-rate" discounts on
telecommunications services and equipment.

Rather than sending it through the mail, Mr. Salvati took a plane to
Cedar Rapids, Iowa, and then drove a rental car 25 miles to the Schools
and Libraries Corp.'s processing center in Iowa City to deliver it in
person.

If all goes as planned, the trip will be well worth it: New York
City schools have applied to the SLC for discounts totaling $60
million--likely the largest amount of any district in the country. The
discounts would allow the majority of district schools to be wired for
Internet access in seven classrooms, the library, and an administrative
area.

Mr. Salvati, a special assistant to the chief information officer of
the New York school board, said that when he turned over the
application to a woman at the SLC, he felt "a sense of satisfaction
that all that work was now in the hands of the people who would make it
real."

Then he gave the woman a Big Apple pen.

Like thousands of other schools and districts, the 1 million-student
New York City district submitted its application on or before April 15,
the end of a 75-day window established by the Schools and Libraries
Corp.

The SLC, created by the Federal Communications Commission to
administer the E-rate program, has promised it will consider any
applications submitted by April 15 as if they had all arrived on the
same day.

Deliveries by personal courier are only one sign that educators are
taking the E-rate program very seriously.

"The expectations of our members are extremely high," said Carolyn
Breedlove, the senior telecommunications lobbyist for the National
Education Association. "The state [education] people have managed to
leverage tremendous resources. They've done bonding. They've leveraged
money from state resources. It's all based on the foundation of the
E-rate."

Funding Questions

To receive an E-rate--for education rate--discount, an applicant
first has to submit Form 470, which summarizes a request for services
or equipment.

Then the applicant has to turn in Form 471. That form, which Mr.
Salvati was delivering last week, lists the contracts the applicant has
signed with vendors.

But there is much uncertainty among educators that the money to pay
for all the contracts will actually come through. (See related
story, Page 24.)

"Is this all for naught? You do keep an eye on Congress. You keep
seeing them questioning a lot of things," said Scott Schiller, the
supervisor of television resources for the 121,000-student Prince
George's County schools in Maryland, who helped to fill out the
district's E-rate application.

"There has been a lot of smoke--if not fire--[in Congress] about the
program being too large and about it covering internal wiring," agreed
Leslie Harris, a lobbyist for the Consortium for School Networking and
the International Society for Technology in Education.

At the same time, she said, "I believe there are people in Congress
who will throw their bodies in front of any move that would seriously
injure this program."

Through the program authorized under the federal Telecommunications
Act of 1996, Congress has said that $2.25 billion in discounts will be
distributed per year on a wide range of telecommunications services for
schools and libraries. The money will be collected from
telecommunications companies.

But Congress has also agreed that only $625 million of that amount
will be collected in the first six months of the program, before June
30 of this year.

Donald Meyer, a spokesman for Sen. Olympia J. Snowe, R-Maine, a key
proponent of the E-rate program, said last week that Congress won't go
above that level until it receives a report from the FCC on how the
program has been working so far.

"Congress is waiting to see the results of an FCC report that is
going to say how much is being spent and how much is needed," Mr. Meyer
said.

Heavy Demand

While the FCC is not scheduled to release such a report until May 8,
it's not hard to see how at least the initial $625 million could be
used up almost immediately.

A survey conducted by the Washington-based Council of the Great City
Schools shows that 35 of its member districts alone have asked for
discounts totaling $305 million.

The SLC said last week that it had received 46,000 Form 470s from
schools, districts, and consortia. Some 35,000 of those forms had been
filed in time for the applicants to make the 75-day window for their
Form 471s.

If for some reason Congress doesn't collect the full $2.25 billion,
or if that amount of money doesn't stretch to all the applicants, some
schools could be in a bind, said Ms. Breedlove of the NEA.

While schools and districts were encouraged to put escape clauses in
the E-rate-related contracts they signed with vendors, "some of them
forgot to do the contingency part," she said.

Schools and libraries with the greatest need would receive discounts
first if Congress limited funding, Ira Fishman, the executive director
of the Schools and Libraries Corp., said in an interview.

"The FCC would require the most disadvantaged applicants to receive
the highest priority," he said.

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